The Federal Trade Commission in 1968:
Times of Turmoil and Response
Mary Gardiner Jones
MARY GARDINERJONES is President of
the Consumer Interest Research Institute, 1631 Suter's Lane NW,
Washington, D.C. 20007. She
served as an FTC Commissioner
from 1964-73.
The decade of the sixties was a period of acute challenge for the Federal Trade
Commission. Deep seated changes were going on both in our economy and in
our political attitudes and sophistication. The strains of this social and political
upheaval were evident as well at the Federal Trade Commission, then a littleknown but important economic enforcement agency.
The marketplace had changed from a relatively simply structured local owner/
seller/consumer place of exchange based on personal relationships, to an impersonal marketplace of giant national producer-sellers. By the 1960s most consumer goods were promoted throu^ national advertising and sold by national
chains which had little or no ties to the local community. Automation and technology created a raft of new products with unique and unfamiliar properties. These
new products made do-it-yourself repairs increasingly difficult and rendered consumers dependent upon third parties, both for information on their essential
characteristics and proper use, and for product servicing.
Paralleling these msdcetplace changes came new political demands and sensitivities growing out of the dvil ri^ts movement: a national focus on the needs
of the disadvantaged and the poor.
In 1962 President Kennedy issued the first charter of consumer rights. This
was followed in 1964 by President Johnson's appointment of Esther Peterson as
the first Special Assistant for Consumer A&iirs and the creation of the President's Committee on Consumer Interests. In 1966 the Freedom of Information
Act was passed, opening up much of the federal government's activity to public
scrutiny. Nineteen sixty-six also saw the publication of Ralph Nader's first major
expose, Unsafe atAr^ Speed. That book almost single-handedly created a new
safety ethic in the marketplace. Nader focused attention on the automobile manufecturers' obligation to produce safe cars rather than on educating the "nut behind
the wheel" on accident avoidance.'
Thus, consumers began to give voice to their concerns about both the quality
and the equality of the marketplace, and to assert their right not to be victimized
by the laws and practices of a market which had evolved in a different era, in a
different economy and in a different society. The genius of mass marketing had
delivered the goods, but not the means for dealing with unhappy consumers. For
many, government became as much a part of the problem as it was seen by
others as the solution.
The Kemer Commission report in 1968 (on the riots following Martin Luther
King, Jr.'s assassination) cited credit and sales practices in the inner cities as one
of the 12 most deeply felt grievances of inner dty residents, concluding:
what the rioters appeared to be seeking was fuller participation in the social order and
the material benefits ei^oyed by the majority of American citizens. Rather than rejecting
the American system, they were anxious to obtain a place for themselves in it.^
»Nader, Ralph. Unsafe at Any Speed. PB, 1966.
JPP&M, Vol. 7
(1988). 1-10
' Report of the National Advisory Commission on Civil Disorders (Kemer Commission), July, 1968,
p. 7.
The FTC in 1968: Times of Turmoil
Gardiner Jones
Also by 1968, recommendations for legislation specifically directed toward
consumer problems had become a regular feature of ^ e President's State of tbe
Union messages. The Congress responded with what was, by 1975, to become
an onslau^t of new consumer laws.^
Finally, in 1969 Nader unleashed his bitter report criticizing tbe FTC for its
rear-view mirror approach to enforcement calling the Commission " . . . a self
parody of bureaucracy, &t with cronyism, . . . manipulated by the agents of
coinmerdal predators, impervious to governmental and citizen monitoring."^
Nader's blast was followed by a more temperate but equally critical report on the
FTC's performance by a special Commission of the American Bar Association,
created at the request of President Nbcon.^
It is against this background of change and turmoil that the FTC's performance
in the sbcties must be seen. This paper does not atten:q>t to evaluate the pros and
cons of the aiddsm directed against the FTC.^ Rather, it reviews the FTC's
action during the 1960s to adapt its powers and enforcement strategies to deal
with the challenges of the new marketplace dynamics, and their devastating
impact on consumers.
It is my thesis that in the decade of the sixties, the Commission, for all its
ia.\Ats of slowness and too frequent distraction with the irrelevant, nevertheless
displayed itself as innovative, capable of changing old habits and patterns of
enforcement, and committed to devising new enforcement strategies and testing
new legal interpretations of FTC law in order to deal with the new market
conditions confronting consumers. Prior to the Commission's reorganization in
1970 under the aegis of Casper Weinberger, (later Director of the OMB and
Secretary of Defense), and Miles W. Kirkpatrick (the prindpal author of the ABA
report), the Commission's adaptation to the new marketplace had been essentially the product of the top down pressure on the staff by the Commissioners.^
After 1970, the Commission's more consumer-oriented approach and innovative enforcement strategies were mstitutionalized and expanded by the new staff
brought in by the new Chairs. This much-trumpeted "revitalization" populaiiy
held to have begun in 1970, but which in fact had been gathering steam from
within the Commission during the late 1960s, was fueled in large part by the
Nader and ABA criticisms of the Commission. Its renewed shape and vigor
resulted from the imaginative leadership of its new Bureau directors, Robert
Pitofsky and Alan Ward, and the Infusion of new, young attorneys, sodal scientists and economists who had come to the agency in large numbers after the
1970 reorganization.^
^e.g. Fair Packaging and LabelKng Act, 80 Stat. 1296, 15 U.S.C. 1451 (1966) and the Consumer
Credit Protection Act, 82 Stat. 146,15 U.S.C. 1601 (1969).
* E. Cox, R. FeDmeth andj. Schulz, The Nader R^ort on Ae Federal Trade Commission (1969), p. viL
^ Report of the ABA Commission to Study the Federal Trade Commission (September 15,1969).
' A rich and lively literature commenting on the FTC has developed. For example, see Ash Coundl:
President's Advisory Coundl on Executive Organization, A New Regulatory Framework—Report
on Selected Independent Regulatory Agencies (Washington, D.C. GPO, 1971), esp. pp. 1-55 and
87-95.
^ The Commissioners in this period were: Chairman Rand Dixon, Everette Maclntyre, Philip Efanan,
Leon Higginshotham, replaced in 1984 by John Reilly vho was succeeded by James Nicholson in
1969 and Mary Gardiner Jones. Caspar Weinberger vbo was appointed to James Nicholson's seat
was named Chair in January 1970 and succeeded as Chair by Miles Kirfcpatrick in September 1970.
* The reorganization also resulted in widespread resignations of many of the older attorneys viho had
been with the Commission since the 1930s. It also produced extensive changes in the administrative
and bureau division directors.
The FTC in 1968: Times of Turmoil
FTC Programs and
Strategies
FTC Powers
The Federal Trade Commission is a quasi-judicial body charged with enforcing
Section 5 of the FTC Act. Section 5 is a highly elastic mandate. It prohibits "unfair
methods of competition and unfair or deceptive acts or practices in commerce."
with the 5-member FTC deciding what conduct is unlawful. The FTC also enforces Section 7 of the Clayton Act prohibiting anti-competitive mergers and price
discriminations. The FTC has broad administrative powers to achieve its statutory goals t h r o u ^ litigation, education, advice to business, and investigative
hearings and economic reports. Its principal sanction in the early sixties was the
power to issue "Cease and Desist" orders against businesses operating in interstate commerce found to have violated the law.^
While recognizing that consumers were an important beneficiary of its actions,
the FTC traditionally had regarded its statutory mandate as focused almost exclusively on the conduct of business. Thus, complaints were issued against offending
businesses and guides, and advertising alerts were developed to help business
comply with the law. Advisory opinions on the legality of intended actions were
given to businesses that asked. Educational materials also centered on helping
business executives understand their obligations under the law. The agency's
investigative hearings and economic reports dealt primarily with actions of the
business community that affected other businesses or the market, not on those
directly affecting consumers.
FTC Policies and
Practices in the 1960s
In the 1960s, the FTC gradually changed this basic approach to its statutory
responsibilities. FTC shifted its enforcement strategies away from simply stamping out violations of law as they might come to light. The Commission began to
develop enforcement programs designed to translate consumer expectations
about the marketplace into enforceable business obligations and to redress the
imbalance of power which existed between consumers and sellers. These new
enforcement programs were reflected in new outreach policies towards consumers, in the exploration of new areas of concern and in the development of new
enforcement strategies and innovative redress mechanisms to eniiance the impact of the Commission's enforcement actions.
Commission Outreach
Actions
The Commission had traditionally placed almost sole reliance on its mail bag as a
prindpal source of business actions vt^ch mig^t violate the FTC Act. In the 60s,
the inadequacy of this approach became increasingly apparent: consumers could
not complain unless they knew their r i ^ t s were being violated. Only a fraction
of those who had a complaint would know to write to a tiny Washington agency
whose name sounded like the group handling international commerce issues (i.e.,
the International Trade Commission-ITC). The public needed guidance from the
Commission as to what practices might be illegal. It became essential for the FTC
to find new ways to enlarge its ability both to publicize its activities and to find
out directly from consumers which aspects of the market were giving them the
most difGculty.
Hie Commission compiled a consumer mailing list for the disseniination of
consumer materials—^the first ever compiled at the Commission—and developed
new communication vehicles beyond the Federal Register and traditional press
^ Cease and Desist orders may be appealed to a U.S. Court of Appeals, which will sustain them as it
finds that they are supported by "substantial evidence" and within the broad scope of the powers
granted to the Commission.
Gardiner Jones
release, to provide the public with information about the Commission's activities.
After the Freedom of Information Act became law in 1966, the Commission
broadened its disclosure polides to provide the public with increased information
about Commission advisory opinions, proposed consent orders and investigations
involving business practices that posed r ^ s to consumer health or safety. ^^
The Commission explored new sources of potential law violations such as the
garnishment records of local courts. It began to use its investigative powers
extensively.
In December 1968, the Commission conducted 9 days of hearings to identify
public and private sector consumer protection and minority business programs.
Ei^ty-seven businesses testified from consumer groups, businesses, legal assistance centers and federal, state and local consumer protection officials. The goal
of the hearings was to identify the most pressing problems confronting consumers and to determine what programs existed, the gaps in these programs and how
the Commission could strengthen its own programs in these areas. Areas in
which information was specifically solidted by the Commission induded the kinds
of corrective action required to redress these problems: an evaluation of current
FTC and other consumer protection and education programs, and the need for
linkages between the FTC and private consumer groups especially concerning
low-income consumer problems.^^
In its most wide-ranging exploration of national market practices affecting all
consumers, the Commission initiated hearings in October 1971 on advertising
practices.^ The ambitious goal of this effort was to enable the Commission to
better understand the impact of television advertising on consumers, and to
frame more effective relief against misleading and deceptive advertisements,
hearings on modem advertising techniques helped to educate the public and the
Commission about the new sophistication of advertisers and their agendes. Here
again the technology seemed to have made giant strides v ^ e the FTC had
struggled to stay abreast.^
The Commission also reached out directly to consumer groups and to state
and local consumer protection offices to learn first-hand which types of marketplace deceptions were of most concern to consumers. Furthermore, the Commission attempted to ascertain how the marlce^Iace was impacting consumers'
ability to choose and to understand the properties of the goods and services being
offered to them.
The Commission created a federal-state liaison office in 1966. One important
result was that the FTC began aggressively to persuade state and local authorities to enact "little FTC acts". By 1969, 28 states had adopted this legislation
and the remaining states had some kind of similar legislation on its books. At the
same time, the Commission also worked dosely with state and local consumer
protection agendes and with local consumer groups to be responsive to the
problems and needs of consumers and to coordinate its enforcement work with
^0 Wagner, Susan, 77K Federal Trade Commission, (Praeger, 1971), p. 204.
" FTC Announcement, Antitrust and Trade Regulation Reports, No. 365, p. A15 (7-9-68).
«FTC Announcement, Antitrust and Trade Regulation Reports, No. 527, p. A14 (8-24-71). The
Commisaon's hearings are summarized and analyzed in A. Howard and C. Hulhert, Advertising and
Oie Public Interest: A Stc^R^ort to Ote Federal Trade Commission (1973).
13 Transcript of Advertising Hearings in FTC Library. This (Moneering learning effort has been continued by the Commission to the present day. Advertising technology and the enforcement rules and
mechanisms have continued to evolve, if not so rapidly as seemed true in 1971.
The FTC in 1968: Times of Turmoil
5
state attorneys general and consumer protection agency administrators. In 1970,
following a pilot program in the District of Columbia, the Commission created
federal and state level government and consumer task forces in major ddes
throu^out the United States, working under the aegis of its regional field offices
to better coordinate these resources in combating consumer fraud and deceptions."
FTC Focus on New Areas
of Consumer Concern
In 1965, the Commission launched a concentrated program to eliminate retail
installment credit abuses that were particularly rampant in inner cities but existed
in more affluent areas as well. The fruit of this effort was a series of complaints
attacking a variety of retail credit practices a^s deceptive or unfedr.^^ These complaints challenged various aspects of the holder-in-due-course doctrine, un&ir
provisions in retail installment contracts, unconsdonable pricing and easy-credit
advertising.
In 1968, the Commission developed a special enforcement program focused
exdusively on consumer fraud perpetrated on inner dty residents. The program
was designed to test out the effectiveness of the Commission's powers in stamping out hardcore fraud. This program was a follow-up to an FTC Economic Report
on Credit and Retail Sales Practices of DC Retailers issued the preceding year
comparing the access to and cost of credit for low-income and middle-income
consumers in the national capital. ^^
In addition to its concern with credit practices and ghetto frauds, the Commission also reacted to high consumer frustration with supermarket games of chance
and warranties on new cars. Public hearings before the Commission brought out
testimony from both business and consumers on ways to remedy the problems
identified in staff studies." The FTC enacted a Trade Regulation Rule to address
consumer problems with games of chance.^^ As to new car warranties, the
Commission made a con:^)rehensive report to Congress in 1968.^^ That Report
was one of many Actors ^ t led to the enactment in 1975 of the Magnuson-Moss
Warranty Act, a comprehensive scheme to improve consumer protection for
consumer product warranties.^
Perhaps the most creative effort to explore the reaches of its Section 5 jurisdiction was the Commission's dedsion in 1968 determining that Sperry Hutchinson's (marketers of Green Stamps) games of chance were unfair and deceptive.
The Commission's unfairness jurisdiction had been largely unused up to this time.
The Commission's efforts were rewarded by the Supreme Court's opinion handed
" FTC News Release, February 5,1970.
»5 e.g. An-State Industries of North Carolina. FTC DKT. 8783, 3 Trade Reg. Rep. No. 18,740 (April,
1969), affd. 1970 Trade Cases, No. 73,112 (4th Cir. 1970); and Leon Tashof t/a New York Jewelry,
FTC Dkt. No. 8714, 3 Trade Reg. Rep. No. 18,606 (December, 1968).
'* The Commission's programs to combat inner dtyfraudare described in Jones, Mary Gardiner, "The
Inner City Marketplace: The Need for Law and Order," George Washington Law Review, vol. 37,
p. 1051 (1969).
" Economic Report on the Use of Games of Chance in Food and Gasoline Retailing, 1968 and Trade
Regulation Rule proposed 8-16-69, 2 CCH Trade Reg. Rep. No. 7,975; FTC Staff Report on
Automobile Warranties, 1968.
1' 16 C.F.R. 419, originally issued in 1969.
u FTC Report on Automobfle Wananties, 1970, Antitrust Trade Regulation Reports, No. 384, p. A18
(11-19-68).
» 1 5 U.S.C. 2301-2312 (1982).
6
Gardiner Jones
down in 1972 confirming the Commission's wide discretion in determining what
constitutes a violation of Section 5.^^
In 1969, the Commission moved heavily into the area of information disclosures. The Commission recognized that the marketplace works properly only
when buyers have adequate infonnadon about the goods and services they want.
With the enactment of trade regulation rules, the Commission began a long series
of requirements that seUers provide information disclosures which consumers
needed in order to make effective choices in the marketplace.^ This effort to
ensure that consumers have adequate information both empowered consumers
to obtain the products they wanted and compelled markets to follow the conq}etitive model. Thus it marked the fulfillment of the FTC's dual consumer protection
and competition missions.
Another innovation in consumer protection was the development of the cooling
off period as a remedy for high pressure sales. First employed in door-to-door
sales cases after proof of deceptive pitches delivered under high pressure, the
cooling off remedy was h i ^ y effective. It allowed consumers to protect themselves with a minimum of government involvement by cbanging the contract rules
of the game. The Commission enacted a three-day cooling off right for all door-todoor sales in 1972.23
In 1970, the Commission moved into the field of children's advertising. It filed
several complaints involving advertising of children's products or making special
claims about the product's value to children's health. Most important, the Commission ruled that children's limited experience and lack of perceptual sophistication called for special scrutiny of advertising to the very young. After cases such
as Mattel, it was dear to the advertisers that children were to be a specially
protected group.^ By 1973, the Commission had tripled the number of layers
prosecuting all false advertising cases.
While concentrating much attention on consumer protection activities during
this period, the Commission displayed an equally imaginative approach to its
antitrust responsibilities. The Commission initiated nuyor economic and industry
studies of industries and practices which had particularly severe impact on consumers.25 In the eariy 60s, the Commission established a premerger notification
program requiring large companies to notify the Commission of any intended
mergers.^ The Federal Trade Commission also led the way in antitrust enforce-
V. Sperry Hutchmson, 405 U.S. 233 (1972).
^ See, e.g. its Trade Regulation Rules requiring disclosure of the power consunq>tion On watts), light
output Cm lumens) and design life (in hours) of electric light bulbs (12 Fed. Reg. 528, July 31,1969),
of the gasoline octane ratings at gasoline pumps (2 CCH Trade Reg. Rep. No. 7969, July 30,1969,
and of permanent care instructions disclosing directions for cleaning and laundering of textiles, 2
CCH Trade Reg. Rep. No. 7979, November 4,1969.
H16 C.F.R. 429.
^ In December, 1970, the FTC announced its intention to work with the FCC to explore the possibility
of FTC-FCC hearings on children's advertising. Antitnist and Trade Regulation Reports, No. 494,
p. A13 (1-5-71).
^ See e.g.. Commission studies conducted of marketplace structures and practices impacting ccmsumers in the bread and fhiid milk industries.
* This was the precursor of the enactment by Congress in 1976 of the Hart-Scott-Rodino Premerger
Notification Act to establish the notification requirement for all m^or nwrgers. 5 U.S.C. 7A.
The FTC in 1968: Times of Turmoil
7
ment involving conglomerate mergers.^' It conducted studies of marketplace
structure and practices impacting the baking industry and issued merger guidelines in the fluid milk industry.^ The Commission has been uniformly looked to
as the chief source of intelligence about industrial concentration.^
Enforcement Strategies and
Remedies
One of the eariiest actions taken by the Commission to strengthen its enforcement arsenal was to discontinue accepting "assurances of voluntary compliance"
from companies as a way of settling proposed cases. These assurances had had
no deterrent effect. In essence, they permitted a company to engage in practices
which the Commission regarded as law violations and simply to discontinue these
\\^en the Commission decided to challenge their legality. The Commission also
began to shift away from issuing guides to businesses on nuirketplace standards.
Instead, the Commission devoted more of its enforcement resources to issuing
trade regulation rules.^ These rules established similar standards but carried the
force of law in the same manner as an FTC complaint.^^
The Commission also turned its attention to creating more innovative remedies
to strengthen the impact of its cease and desist orders. This was critically needed
if consumers were to realize the benefits of Commission actions. Aided—indeed
in some cases pushed—by consumer groups, the Commission gradually broadened its arsenal of enforcement tools to encompass requiring three-day cooling
off periods for door-to-door sales,^ prohibiting the sale or transfer of installment
contracts unless existing consumer defenses against their original sellers were
preserved,^ and requiring refunds or restitution to consumers misled by the
respondent's unfair or deceptive practices.**
In 1971, the Commission addressed its first request for substantiation of advertising claims to the major domestic automobile manufacturers. This marked
^ The first conglomerate merger case, a product extension merger, was brought by the FTC against
Proctor & Gamble. See FTC v. Proctor & Gamble, 386 US 568 (1967). In 1969, the FTC sent to
the Congress its report on its in-depth investigation of the conglomerate merger movement analyzing its cases, effects and impHcations. Wager, op. cit, ^. 124.
^ Economic Report of the Baking Industry, Antitrust Trade Regulation Reports, No. 369, p. A4
(8-6-68) and Merger Guidelines in the Fluid MiDc Industry, Antitrust Trade Regulation Report, No.
620, p. A166 (7-3-73).
^ Kohlmeier, Louis, The Regulators (New York, Harper & Row 1969), p. 259.
^ In 1962 the Commission had amended its Rules of Practice to provide for issuance of trade regulation
rules (TRRs). 27 Fed. Reg. 4636, 4796 (1962). It issued its first TRR in 1964 requiring cigarette
companies to disclose the hazardous nature of cigarette smoking. Statement of Basis and Purpose
of Trade Regulation Rule, 29 Fed. Reg. 8325, 8369 (1964). The Commission's power to issue such
TRRs wasfinallyconfirmed in National Petroleum Reftners Association v. FTC. 482 F.2d 672 (DC
Cir. 1973), cert, denied, 42 Law Week 3482 (2-2fr-74).
3' See, e.g. FTC, Trade Regulation Rule Concerning a Cooling Off Period for Door to Door Sales, 36
Fed. Reg. 1211 (1971).
^ First ordered in Household Sewing Machine Co., FTC Dkt. 8671, 3 Trade Reg. Rep. No. 18,822
(August, 1969).
^ See FTC Order in All-State Industries of North Carolina, FTC Dkt. 8783, 3 Trade Reg. Rep. No.
18,740 (April, 1969) and Everette Eugene Miller, FTC Dkt. No. 19,163 (March, 1970) subsequently incorporated into a trade tegulatkm rule.
^ The first complaint containing this remedy was Curtis Publishing Company, FTC Dkt. 8800,3 Trade
Reg. Rep. 18, 798 (October, 1969); see also Windsor Distributor, FTC Dkt. 8773, 3 Trade Reg.
rep. No. 19,157, and London Credit and Discount Corp., FTC Dkt. 8812, 3 Trade Reg. Rep. No.
19,195.
8
Gardiner Jones
the opening salvo in the Commission's development of its h i ^ y successful advertising substantiation program.^ Under this program, advertisers were required
to maintain substantiation of any claims which they made in their advertisements.
This program, backed up by a vigorous enforcement effort against ^ e and
misleading advertisements, resulted in a significant improvement in the hourly
advertising messages.
Peihaps the most imaginative of the remedies developed by the Commission
in this period was the concept of corrective advertising. Suggested to it by a
consumer group which styled itself SOUP (Students Opposed to Unfair Practices), the Commission proposed the remedy for the first time in 1970.36 wj^ig
the Commission declined to order the remedy in that case, it nevertheless held
that in a proper case it could order an advertiser to run corrective advertisements
to cure lingering deception caused by claims that the Commission found misleading. One year later, in a complaint brought against Continental Baking Company,
the first corrective advertising order was entered by the Commission. ^^
Finally, the Commission for the first time permitted a consumer group to
intervene and participate formally in one of its cases.^ The importance of this
ruling must not be overiooked. One of the most frequent criticisms leveled at the
Commission is that it is overly infiuenced by industry. No specific evidence has
ever been brou^t forward to substantiate this criticism so far as any individual
Commissioner is concerned. Nevertheless, the criddsm has some truth in it so
far as the Commission tends to pay more attention to questions of whether its
complaints were overstated or its orders too strong.
This comes about not because Commissioners are too industry oriented. It is
a natural consequence of the fact that only respondents can appeal its decisions.
As a result, the Commission focuses on arguments which respondents are likely
to make in opposition to its complaints, or TRRs, since these are the only parties
who can challenge its actions in court and thus appeal Commission decisions. If
those persons who were injured by the alleged violations charged by the Commission were in proper cases permitted to intervene as parties, they too would have
the right to appeal Commission decisions to the courts. Thus, the Commission
would be forced to focus its attention on the strengths and weaknesses of its
complaints and orders from the point of view both of the business being challenged, and of the public >diose interests were allegedly impacted.
Moreover, if the actions of the Commission in dismissing complaints as well
as those sustaining complaints could be appealed in Court, I believe the legitimacy
of Commission actions would be substantially increased in the eyes of the public.
Unfortunately, the Commission has never pursued its Firestone intervention
decision in this direction. I am convinced that this is an important future area for
the Commission to explore.
^ See Report on the Advertising Substantiation Prograni of the Federal Trade Commission, April,
1972, Antitrust Trade Reg. Rep. No. 574, p. A14 (8-1.-72).
Firestone Rubber & Tire Company, FTC Dkt. No. 8818 (October, 1970), Antitrust Trade
Reg. Rep. No. 485, p. A2 (10-27-70).
^ "How Big Does the FTC Want To Be?" Fortune, vd. 85, p. 107 (February, 1972).
^ Firestone Rubber & Tire Company, supra, note 36.
The FTC in 1968: Times of Turmoil
Conclusion
9
The Commission actions in 1968, implemented, expanded and institutionalized
in the subsequent years, provide a dramatic demonstration of the flexibility and
responsiveness of the regulatory process to social, economic and technological
changes in the marketplace. Accepting all the criticisms of the FTC—and these
were many and valid—the Commission still emerged in this period as able to
focus on such significant marketplace practices as health and safety advertising
claims, unconscionable credit practices and warranties which wreaked serious
harm upon consumers. It showed itself capable both of shifting its priorities and
its internal administrative processes, and of creating new innovative remedies.
Several factors should be singed out as playing an important role in enabling
the Commission to respond to the challenges which confronted it in the 1960s.
The first of these factors is the multi-headed nature of the Commission's
governing body. Much criticism has been leveled at multi-headed agencies because of their alleged diffusion of responsibility and accountability. However,
there is disagreement on this point. In the 60s, much of the Commission's new
enforcement emphases and strategies was pushed initially by individual Commissioners—^firequently over the opposition of the Chair. Individual Commissioners
bring different strengths to their positions and can exerdse leadership in different
aspects of the Commission's business. Commissioner Elman, for example, lead
the way in many pathbreaking innovative interpretations of the Commission's
statutory responsibilities. He wrote the most comprehensive justification for the
Commission's Trade Regulation Rule authority^ and was equally critical in focusing the Commission on the anti-competitive aspects of conglomerate mergers.^
Much of the Commission's focus on consumers, and particularly on the needs
of low-income consumers, resulted from my deep concerns in these areas informed and enhanced by ongoing contact with consumer groups t h r o u ^ invitations to address them or to participate in various business-consumer panels.
James Nicholson's interest in the Commission's backlog and case overioad was
responsible for important new procedures and the development of a case management system which still plays a vital role in the Commission's management
of its business today. Certainly whatever one may think about the Commission's
Robinson Patman jurisdiction, it was Commissioner Maclntyre's steadfast championship of this statute that ensured its active enforcement during this period.
Second, the Commission's ability to respond to the new needs of consumers
in the 1960s was substantially facilitated by its members' direct and frequent
contacts with consumer groups. In part, contacts during this period depended
essentially on the personal interests of individual Commissioners and bureau
directors. But the procedures now in place—^plus the traditional enforcement
tools of a regulatory agency like the Commission—investigative hearings, limited
rights of petition and intervention and frequent Congressional-Commission interchanges, both formal and informal, ensure that the Commission will be forced to
confront the various constituencies impacted by its programs or lack of programs.
Finally, the quality of the Commission chak and of the principal Commission
bureau chiefs is also critical to the Commission's long-term performance. Individual Commissioners can infiuence the Commission's performance as noted above.
But it is the day-to-day work of the Commission lawyers, economists and sodal
scientists, directed by their bureau chiefs who in tum report to the Chair, that
will determine the innovativeness, soundness and relevance of the Commission's
programs.
^ see supra note 30.
*" see supra note 27.
10
Gardiner Jones
Hiese three factors primarily accounted for the Commission's success in the
late 60s and early 70s, enhancing the consumers' awareness of their rights, and
significantly expanding the deterrent effect of its enforcement strategies. It was
these programs which enabled the Commission to raise the standard of what was
an acceptable business practice, and which brought about significant changes in
the conduct of the business community, many of which prevail today.